The recipe for a stronger housing market in 2026
Housing affordability is expected to improve gradually as builders adopt more buyer-friendly strategies. Incentives such as mortgage rate buydowns, flexible financing and pricing concessions will remain common, while smaller home designs, cost-efficient construction and strategic locations help keep prices in check. On the existing-home side, easing mortgage rates and more realistic seller expectations are expected to bring additional inventory to the market, supporting a slow but steady recovery.
At the same time, demand for rentals is projected to grow as high homeownership costs and demographic shifts push more households to rent. While Sunbelt markets are recovering from recent oversupply, rent growth and new development are picking up in the Midwest and Northeast. Build-to-rent housing is also expected to expand as financing improves. Looking toward 2026, affordability pressures, evolving migration patterns and labor-driven relocations, particularly back to the Sunbelt, will collectively shape a more balanced, though still cautious, housing landscape.
